U.S. AND IRAN RUSH TO BOLSTER KURD MILITARY:Both the U.S. and Iran, longtime competitors for influence in Iraq, are rushing to reinforce the Kurdish Peshmerga to defeat the radical Sunni group Islamic State. While the U.S. has conducted airstrikes to help the Peshmerga retake two towns, Kurdish commanders have met with Iranian advisers. In Erbil, the capital of the semi-autonomous Kurdistan region, U.S. advisers huddled this week with Peshmerga and Iraqi air force commanders. The parallel tracks demonstrated clearly that the U.S. and Iran have found common cause in the effort to resuscitate the Peshmerga, long mythologized as Iraq’s most capable fighting force. Nour Malas and Joe Parkinson report.

WSJ STORIES YOU SHOULDN’T MISSU.S. SWAY OVER ISRAEL AT A LOW:White House and State Department officials leading efforts to rein in Israel’s military campaign in the Gaza Strip learned last month that the Israeli military had been quietly securing supplies of ammunition from the Pentagon without their approval. Israeli and U.S. officials say the bureaucratic maneuvering made it plain how little influence the White House and State Department have with the government of Israeli Prime Minister Benjamin Netanyahu—and that both sides know it. Adam Entous reports. Israel and the Palestinian negotiators renewed a cease-fire, which was holding on Thursday as talks over a long-term agreement remained deadlocked.

Bloomberg News

HUG HYPE?:A scheduling quirk brought both President Obama and Hillary Clinton to Martha’s Vineyard just a few days after she caused a political kerfuffle with a pointed critique of the president’s foreign policy, the sharpest sign of disagreement between the onetime rivals and sometime allies. While the two top Democrats mostly stayed on separate sides of the island, they were expected to “hug it out” Wednesday evening at a birthday party for a mutual friend, Ann Jordan, the wife of veteran Democratic power broker Vernon Jordan. The White House offered no details, saying only that the Obamas were happy to see the Clintons. Colleen McCain Nelson reports.

SURGE OF IMMIGRANT CHILDREN TESTS SCHOOLS:Public schools around the country are returning from summer break to face a challenge: integrating and paying for children who have streamed across the Mexican border this year. The children, mostly from Central America, are those who have been released to sponsors while they await immigration proceedings. Because the children generally lack English skills, have often received limited schooling and may have suffered emotional trauma, they present schools with a host of needs that could strain resources. Arian Campo-Flores and Miriam Jordan report.

CONSUMERS TAKE A JULY BREAK: July retail sales were essentially unchanged from June, as improvement in the labor market failed to deliver stronger wage and spending growth. Consumer spending drives the U.S. economy, accounting for more than two-thirds of output. But sales growth at stores and restaurants has slowed since the spring. In July, Americans spent more at clothing and grocery stores but scaled back purchases at auto dealerships and department stores. Ben Leubsdorf reports.Ben Leubsdorf reports.

In a tough midyear election season, Democrats have one distinct advantageover Republicans: Hollywood money. The Hill’s Judy Kurtz reports that movie stars and executives are opening up their checkbooks for Democratic candidates, particularly in tight Senate races, and particularly for Alison Lundergan Grimes, who is challenging Senate Minority Leader Mitch McConnell in Kentucky.

Leslie Gelb of The Daily Beast says that nobody in Washington is proposing a strategy that can succeed in dealing with the Islamist threat the Middle East, and urges President Obama to formulate one that starts with explaining to Americans the stakes: “If the jihadis are allowed to win in these battles and gain a strong foothold in the Middle East, all other neighboring nations will be seriously jeopardized.”

In the WSJ’s Think Tank, Drew Altman writesthat Obamacare is doing better in the real world but not better politically, because opinions about the health system are now locked into a partisan divide that has little to do with how well or badly the new law actually is working.

@GovJayNixon: As Governor, I’m committed to ensuring pain of last weekend’s tragedy does not continue to be compounded by this ongoing crisis. #Ferguson

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About Washington Wire

Washington Wire is one of the oldest standing features in American journalism. Since the Wire launched on Sept. 20, 1940, the Journal has offered readers an informal look at the capital. Now online, the Wire provides a succession of glimpses at what’s happening behind hot stories and warnings of what to watch for in the days ahead. The Wire is led by Reid J. Epstein, with contributions from the rest of the bureau. Washington Wire now also includes Think Tank, our home for outside analysis from policy and political thinkers.